NBN-Telstra deal risks duct eviction: Vocus

Telstra's $11 billion deal with the National Broadband Network Company (NBN Co), which sees it lease its ducts for the NBN fibre network roll-out, may force existing companies out of the ducts, according to dark fibre and datacentre company Vocus.

Telstra's $11 billion deal with the National Broadband Network Company (NBN Co), which sees it lease its ducts for the NBN fibre network roll-out, may force existing companies out of the ducts, according to dark fibre and datacentre company Vocus.

(Credit: Josh Taylor/ZDNet Australia)

In Vocus' submission (PDF) to the competition regulator's discussion paper on Telstra's structural separation undertaking published yesterday, the company said that as most of its own network is located in Telstra's underground network, the possibility of being forced out is of genuine concern.

"There is potential for both Telstra and NBN Co to engage in discrimination in relation to facilities access, including Telstra's ducts, where space is frequently scarce," Vocus stated.

Vocus said that currently Telstra is required to provide access to its ducts under the Telecommunications Act, and so had done so in the past, at a price that Vocus said was "excessive". The company was concerned now, however, because the finer details of the Telstra-NBN Co definitive agreement are not public at this stage, so the arrangement between NBN Co and Telstra over duct lease is not clear.

"There is a real concern that NBN Co will be given priority of duct space over other carriers, including those currently using Telstra ducts for competitive networks," Vocus said.

"Telstra's duct lease to NBN Co is clearly relevant to assessing the likelihood of whether existing carriers will be evicted from Telstra's ducts, though as the deal documents are not public, we are uncertain to what extent."

The company added that in areas where there is limited space in the ducts, other telcos may be forced out to make room for NBN Co's fibre.

"We are aware that in some areas, there is very limited capacity in Telstra's ducts. This includes areas where Vocus' cables are installed in Telstra's ducts, such as South Melbourne. Verifying the availability of space would most likely require physical inspection of the ducts, which would be a vast undertaking," Vocus stated.

"We understand that Telstra's records of duct utilisation are often incomplete and, further, will not always explain if ducts are blocked or otherwise unusable."

Although Vocus noted that NBN Co has not indicated any intentions to force other companies out of Telstra's ducts, the company said that it is unlikely that NBN Co would resort to aerial cables as an alternative, unless absolutely necessary, as the added eyesore is generally disliked by local residents and councils.

In addition to this, Vocus noted that it would be in Telstra's interest to provide the duct space to NBN Co first.

"The summary of the Telstra/NBN Definitive Agreements on NBN Co's website says that Telstra will suffer monetary consequences for failing to make infrastructure available. We consider that this suggests that it is in Telstra's financial interests to give NBN Co priority of access to ducts over other carriers," Vocus said.

"In turn, this suggests that Telstra will be inclined to exercise any contractual right it has to terminate the access rights of other carriers in its ducts."

This would provide a competitive advantage for Telstra, Vocus argued, as any customers affected by their carrier being evicted from the ducts could be picked up by Telstra instead.

Vocus said that if Telstra's structural separation undertaking is accepted, and the NBN-Telstra deal goes ahead, it would then be difficult for telecommunications providers to seek redress. The company has advised the ACCC not to accept the structural separation undertaking unless protections for existing carriers leasing duct space is ensured.